11 replies to this topic

[ag24]

Hi all,

A discussion within the Methuselah Foundation has resulted in the idea that it would be good to determine how effective SENS (or equivalently powerful interventions) would be economically: that is, how much they would need to cost before the cost outweighs the economic benefits of keeping someone healthy. Here we are mainly interested in the macroeconomic question, i.e. "cost" is to be understood as how much it costs to administer the therapies (and possibly also to develop them in the first place) rather than how much they might be sold for. Plenty of work has of course been done on this in respect of much more modest LE, but no one has quite had the nerve to do it for therapies that conferred escape velocity. I am in touch with people with the necessary enabling technology (datasets, software) to develop such forecasts, but it would probably still be a substantial project. If there are any volunteers who feel they have the right sort of expertise (which means pretty good maths, not just computing) and also a chunk of time to dedicate, please speak up. No guarantees that we can make such a project happen, but we'd like to try.

[JonesGuy]

Assuming SENS leads to the ability to continue working, and that the costs of medical treatment are reduced to 'middle age' levels.

Wouldn't it just be looking at the amortized cost of retirement (social security) to death plus the cost of medical care to death?

If a SENS treatment is less than these things, in fact, it makes economical sense to take the treatment. Once SENS therapy becomes less that Social Security alone, then it makes sense for the governement to supply it.

Please note that, unless SS laws change, as life expectacy rises, the cost of SS goes up - meaning that the relative cost of SENS therapy goes down.

[ag24]

There's rather more to it than that, at least in the sort of forecast we're thinking of. One thing is whether people would carry on working permanently or whether they would retire for (say) 10 years in every 30 years. (Either case is a change in SS laws!) Another is the tax people will be paying when they're working, which presumably must be added to the SS saving. A third is the demographics (ratio of people in work to people on SS) and how that changes following the arrival of full-blown SENS.

[JonesGuy]

Yeah, I see what you mean.

Successful SENS therapy effectively means no more retirement, but just vacations. If people can afford 10 year vacations, they might take them, but we won't see these vacations subsidized any more.

I can't put enough thought into, but wouldn't taxes and SS be a wash? If people were taken off of SS, then the SS taxes would also go down. Unless you're counting the additional profit of having the income earners taxed at above the SS maintenance. I think that might be a near wash too, except that people earn more in their later years (generally) and so might be expected to be worth 'more' to the government than a young person.

This is actually a heck of a question. I wish we could get some econ prof to make this an assignment for his class!

[jaydfox]

Check out the attached document, to give you an idea of the types of stuff that Congress or the Social Security Administration takes into account when calculating when the SS Trust Fund will run dry. Practically speaking, from an outsider's perspective, their calculation models would seem to be not more complex than what we want to calculate: i.e. when the SSTF will be exhausted without SENS most likely cannot be more complex than when it will be exhausted with SENS, so this document represents a sort of lower bound on the degree of complexity needed to get an "accurate" number.

That having been said, the amount of accuracy that is lost by removing certain factors probably isn't much, e.g. the breakdown of employment rates by cohorts of age, sex, marital status, and whether there are dependents under age 6 (over 100 cohorts in their study), plus a breakdown into the six worker types (2:agricultural/nonagricultural x 3:wage workers/self-employed workers/unpaid family members), seems a tad overkill for what we're doing.

All we need is a model that roughly comes up with the same conclusions as CBOLT or the OCACT report, i.e. that Social Security will probably be exhausted around 2037-2041 without SENS, with roughly the same graph for the TFR (Trust Fund Ratio, "the ratio of trust fund assets at the beginning of the year to the year's expenditures") over that period, and then we can reasonably add the supplemental SENS variables/equations into that abridged model.

But that's the overkill model. We could obviously come up with something much simpler between now and then. The trick is that we can't just amortize the SS savings unless the person gets the treatment at retirement. If a person takes the treatment 10 or 15 years early, they'll stop paying into social security. Now, not only do you reduce by 1 the draw on the SS fund (which is good), but you reduce by 1 the number of people paying into the SS fund (which is bad). So the numbers don't balance out as simply as taking the discounted SS payouts.

Attached Files

•  freespaper_final.pdf   235.29KB   69 downloads

[jaydfox]

If a person takes the treatment 10 or 15 years early, they'll stop paying into social security. Now, not only do you reduce by 1 the draw on the SS fund (which is good), but you reduce by 1 the number of people paying into the SS fund (which is bad).

Unless, of course, the govenment makes you keep paying into SS even after they've told you that you won't ever get to collect. But given the recent show between Republicans and Democrats, in which neither side wanted to explicitly codify what we all know anyway, i.e. that S.S. is welfare, I don't see this happening. If congress won't agree to lift the cap on SS taxes while keeping a cap on payouts, effectively making a millionaire pay a greater share of taxes for the same maximum benefit (hence the welfare angle), then I don't see Congress having the balls to say that you have to keep paying in, but you'll never collect.

But desparate times will call for desparate measures, so who knows... methinks congress would rather increase the tax rate on everybody, and/or reduce the payouts to everyone, before they'd go to something explicitly welfare-like in nature.

[Mind]

This was a project I thought Imminst should be working on for a long time now. Something that has real world applications right now.

Older folks on SS right now will continue to recieve benefits until full blown SENS arrives. After which the laws will need to be changed. A 100 year old with a 20 year old body should not be allowed to recieve SS. (unless there is some sort of set-up where a person pays into the system and is allowed a government-funded multi-year sabbatical)

Middle aged (and younger) people who pay into the system right now who recieve full blown rejuvenation therapies will likely never collect SS. (unless there is some sort of set-up where a person pays into the system and is allowed a government-funded multi-year sabbatical)

In any case, SS will become more expensive (per government projections - because of demographic reasons) until full blown SENS arrives. After that, problem solved.

[jaydfox]

I agree that this would be a good ImmInst project. When we started discussing this at the Methuselah Foundation, I was considering undertaking it myself, but it'll be a big project to get done. I can get it started, e.g. rough numbers with simple assumptions, etc. A refined, more complex second draft would likely be needed, which will likely be beyond my time availability or my skillset. I'm pretty good at math and computing, but this will involve some actuarial, demographics, and economics skills as well. So Aubrey et al. decided it would be a good idea to look for someone who has the time to help out.

Any takers?

[jaydfox]

If a person takes the treatment 10 or 15 years early, they'll stop paying into social security. Now, not only do you reduce by 1 the draw on the SS fund (which is good), but you reduce by 1 the number of people paying into the SS fund (which is bad).

Unless, of course, the govenment makes you keep paying into SS even after they've told you that you won't ever get to collect. But given the recent show between Republicans and Democrats, in which neither side wanted to explicitly codify what we all know anyway, i.e. that S.S. is welfare, I don't see this happening. If congress won't agree to lift the cap on SS taxes while keeping a cap on payouts, effectively making a millionaire pay a greater share of taxes for the same maximum benefit (hence the welfare angle), then I don't see Congress having the balls to say that you have to keep paying in, but you'll never collect.

Hmm, in thinking about it more, I realize that it would have to be that way. That is, you would have to keep paying until you reached retirement age. The government is "buying out" your SS benefits; if you don't pay until age 70, then they're buying out a less-than-complete "buy-in" to the original SS plan.

Hmm, that should simplify things a lot.

[The Merovingian]

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Edited by The Merovingian, 02 August 2006 - 11:57 AM.

[ag24]

Hi Daniel,

Many thanks for this. SS vs Medicare - UK/US language difference, I meant both. I'm sure we can use your time/skills here, yes. I'll email you with some more details.

[Mind]

After seeing this article about California pension obligations hitting a brick wall and starting to bankrupt cities and soon the whole state, it made me think of this thread once again. Keynesian money printing and debt creation has run its ponzi course and it sure looks like cuts in benefits are coming everywhere. It is going to be harsh. I would say it is even more incumbent upon governments of the world to support the goals of Longecity, SENS, Methuselah, etc... because there are not many other options to get out of this huge fiscal whole. Healthy people can still work. Right?

Also, it brings up the whole social issue of social security, medicare, pensions, what-not. These will become meaningless and a burden if they are kept in their current form. A company or a government cannot pay huge pensions to an increasing number of people if they are living to 100, 130, 170, etc... What a deal it would be!! Work for 30 years and then retire for 100 or more years in great health. Woohooo! Of course the math does not work out. A dwindling percentage of workers cannot support a burgeoning number of retirees, as we have seen already with social security here in the U.S. So I think there should be a transition of these systems once rejuvenation technologies are here and successful. Retirement systems will have to be periodic, if they are to exist at all. Work for 30 years, get 5 years paid sabbatical, then back to work. Of course, in a perfect world (where the Federal Reserve bank is not conducting an idiotic war on saving), people would save enough, build capital and wealth, and then retire on that nest egg. Sigh. A lot of work to do before that day arrives.